§ THE CHANCELLOR OF THE EXCHEQUER
Mr. Speaker, I rise for the purpose of moving that you do now leave the Chair. It had been in my mind that I might make the few observations I have to make in Committee; but I find that we may, perhaps, be some time before getting into Committee, and I believe it will be more convenient to the House that I should say the few words I have to say now, instead of waiting until we get into Committee. At the same time, I do not understand that it is likely the House will desire now to enter into any discussion of the subject I have to 1714 bring before them; but, of course, I am in the hands of the House. I promised some time ago that we would, lay the Estimate for the Vote of Credit that would be required for the War in South Africa on the Table of the House before the close of the month of July, and I am just within my promise, having delayed as long as possible, for the obvious reason that I was anxious to get the latest intelligence, in order to form, as far as possible, an idea of what was likely to be the course and, therefore, the expense of the war. We have not yet received absolutely final intelligence; but we have received intelligence of a character which renders me less indisposed to offer an estimate of what the probable cost of the war will be. I have mentioned more than once in the House that, according to the best calculations we were able to make, we believed that the additional expenditure from the Army Services for the war were at the rate of about £500,000 per month. Recently I have gone with more care into this question, and I have discussed with the Accountant General of the Army, and also the Accountant General of the Navy, all the information that they had at their command, and the result is this—that the War Office calculate that the net cost of the war beyond the sums already provided in the Army Estimates will be covered by £500,000 a-month; and they carry this expenditure at the full rate up to the end of July. From that time it is considered that the expenditure ought to diminish rapidly, although it is probable that it will not come to an end immediately. Therefore, I propose to take a further sum of £450,000 for the possible expenditure on Army account for what might be the remaining period of the war. Then the Navy has given an estimate of £500,000 as the probable cost of transport, and we have allowed a sum of £50,000 for contingencies. Under these circumstances, the Vote of Credit which I shall lay on the Table is for a sum of £3,000,000—that is to say, £2,450,000 for the Army, £500,000 for the Navy, and £50,000 for contingencies. That is the best estimate we can form of what is likely to be required. At the same time, the House is of course aware that in these matters there is room for uncertainty, and that it is impossible to give a complete, full, and accurate account. Reckoning, how- 1715 ever, according to the accounts we have received, and also according to the rate of drawing upon the Treasury Chest, I feel perfectly satisfied that a Vote of that character will be, if not sufficient for the whole of the expenses of the war, at all events sufficient for anything that will be required to be provided between this and the next Session of Parliament. I hope it will fully cover the expenditure that will have to be incurred. That being the case, I must remind the House that that expenditure will raise the total amount of expenditure advanced by this country on account of the South African War to something like £4,500,000, including what was voted at the end of last year—I must also remind the House that that expenditure is expenditure which ought not, certainly, to fall in whole upon the Imperial Exchequer. From the earlier period of these transactions, and, indeed, from the period of the previous war which had been going at the Cape—what is called the Transkei War—we have kept before the notice of the Colonial authorities the fact that the advances that were made by this country were not to be considered as admitting that we undertook to bear the whole of these expenses ourselves. I do not know that at the present moment I can very conveniently go into the details of the claims that we think we shall have against the Colonies. The Papers which have been presented to the House, and especially those which have been presented within the last day or two, will show what the views of Her Majesty's Government have been; and I will only at the present moment refer to one or two despatches rather as indicating what they will do well to pay attention to than attempting myself to exhaust this subject. They will see, in Paper No. 2,000, presented last year, that as early as in January, 1878, Lord Carnarvon called the attention of the Cape authorities to the mode in which it would be right and necessary that provision should be made for the expenditure which was then being incurred at the Cape in connection with the Transkei War. Previous to that time, the arrangements with the Cape had been that they made a normal payment of £10,000 a-year to the Imperial Exchequer in respect of the Forces that had been kept there. But in the end of 1877 two additional regiments were sent out 1716 to the Cape in connection with the war that was then going on, and it was understood that the Cape should bear their cost, and provision was made in this despatch and others that they should make monthly payments to the Treasury Chest on account of the drafts that might be made upon the Treasury Chest for commissariat and other services. Well, that went on until the Transkei War was over; and it will be seen in the next volume, Command Paper No. 2,374, that on the 8th of August, and again on the 19th of December, my right hon. Friend the present Colonial Secretary wrote despatches calling for an account of the expenditure which had been incurred. The House will also see in the same Papers a Minute—a reply, in fact—from the Cape Government to those statements. They will see that the Cape Ministers informed my right hon. Friend that they had already obtained in one way or another the sum of £1,254,000 towards the expenses of that war. They had taken power to raise a war loan of £750,000, and according to this account they had spent £1,254,000. Then I would direct attention to the last and most important despatch of my right hon. Friend, which is to be found at page 3 of the same Book, in the Correspondence which has been delivered within the last few days—the despatch, dated 12th of June, in which my right hon. Friend points out what the principles are upon which the claims to be made against the Cape Colony are founded. I think it would be inconvenient, at the present moment, to provoke a discussion which I doubt whether the House has any desire to enter into, by going into the details; no doubt, that will be a matter for future discussion; but I would draw attention to these particular despatches, as showing the principle upon which we have proceeded with regard so the Transkei War. Now, with regard to the Zulu War, it will be found that there is not the same amount of information in these Papers; in point of fact, this is a matter which is still too incomplete to enable us to deal with it quite in the same categorical manner. Of course, the Colony which is mainly interested in the Zulu War is the Colony of Natal, and various communications have passed between my right hon. Friend and the authorities at Natal urging upon the Governor there to do 1717 all that was in his power to keep down the local expenditure in every way; and also to make provision for the claim that will have to be made upon the Colony of Natal for expenditure incurred on account of Natal out of Imperial funds. With regard to that matter, and, indeed, with regard to the whole question, I may say that general instructions of the strictest character have been given both to Sir Henry Bulwer and to Sir Bartle Frere and, last, to Sir Garnet Wolseley; and, moreover, that it is now the intention of Her Majesty's Government to send one or two officers—the Accountant General of the Army, and probably some gentleman from the Treasury—to go out at once to Natal or the Cape, whichever may be found most convenient, but probably to Natal, in order to examine the accounts, and to see in what way the expenditure can be properly apportioned between the Colonial and Imperial resources. I hope before Parliament re-assembles we shall be in possession of information which will enable us to deal much more satisfactorily with the question than we are able to do at the present moment. Therefore, the net results of what I have at present to say is that we have to provide temporarily for this sum of £3,000,000, which will be required in order to carry us on, as we believe, to the end of the Zulu War. Well, then, I have only to say how that sum affects the finances of the year. The House will bear in mind that at the time of the Budget I estimated the income of the year at £83,055,000. I estimated the ordinary expenditure, excluding anything that might occur from the Zulu War, at £81,155,000, showing at that time a surplus of £1,900,000 of ordinary income over the ordinary Expenditure. Since that time some Supplementary Estimates have been presented to the House, which appear upon the face of them to amount to £89,000, but which, in reality, only amount to £64,000, because the Vote for Cyprus pioneers is merely a transfer from another head of the Estimates. They involve, therefore, an addition of £64,000 to the Estimates of the year. Add to that the Vote of Credit which I shall have to ask on account of the Zulu War, and we get an Expenditure of £84,218,000, showing a deficiency of income of £1,163,000. Well, Sir, the Revenue prospects for the year I cannot say are brilliant; at the 1718 same time, they are not so unsatisfactory as to lead to the belief that they will fall short of the Estimate in the long run. The Estimates were very carefully taken; and I have gone through the present financial Returns with the heads of the Revenue Departments, and, upon the whole, I am of opinion that we may fairly reckon at the present time upon the amount of Revenue which we took for our basis in the month of April. I therefore take the deficiency at £1,163,000, and I have to remind the House that there is a sum which we hope and expect to recover from the South African Colonies. We have claims still against them in respect of what was advanced in former years. I therefore think that we may consider that we have only to make a temporary provision for the present loan. Of course, some little time must be taken in ascertaining what the exact outcome of these arrangements will be; but, for the present, I think it will be sufficient that the House should be asked to make temporary provision for this sum by granting to us the privilege and the right of issuing Exchequer Bonds for the amount of £1,200,000. That will cover the amount, and will, I think, bring the Ways and Means of the year up to the amount which is required by the expenditure. I do not, of course, intend to make that proposal in Committee of Ways and Means to-day; but I shall bring it forward probably on Monday—that will depend upon the other Business. What we have to do in Committee to-day will be merely to effect a renewal of those Bonds which are at the present time falling due. I beg to move, Sir, that you do now leave the Chair.
§ Motion made, and Question proposed, "That Mr. Speaker do now leave the Chair."—(Mr. Chancellor of the Exchequer.),
§ MR. CHILDERS
desired, before the hon. Gentleman the Member for the Elgin Burghs (Mr. Grant Duff) introduced his Motion, to make one or two comments upon the Statement just made by the Chancellor of the Exchequer. He assumed that the House would not, on the present occasion, discuss the circumstances which had led to the expenditure for the Transkei and Zulu Wars, or, indeed, discuss in detail the financial position of the Government. But, at 1719 the same time, it might be convenient to put one or two figures in a simple form, in order that when they did come to the discussion of the question they might be prepared to do so, not only from the point of view of the Chancellor of the Exchequer, but of those who might not quite agree with the right hon. Gentleman. It was worthy of remark that in the last two years they had had six Financial Statements, instead of two. He assumed that the present Statement would wind up the affairs of the present year; but it almost looked as if they were to have a seventh, which the Chancellor of the Exchequer nearly promised to them at the commencement of the next Session. He wanted to remind the House what the exact state of the case about these six Budgets was. They commenced with an Estimate, in February last year, of £6,000,000 in connection with the War in the East. No Ways and Means were asked for this, which the House was even told might not be spent. Then, in April, came the Budget, which added £3,750,000 to the taxation of last year, and £4,500,000 to that of this year, and they were promised that by the end of this year the new taxes would have wiped out all the additional expenditure. In August came a third Budget, with no new Ways and Means, but additional expenditure of more than £2,000,000. The fourth Statement was in last February, with further expenditure to the extent of £1,100,000. Then came the Budget in April, making the accumulated deficit of the last two years £4,930,000, but hoping that the Zulu War would only cost £1,300,000 more, to be met out of this year's surplus. And now they heard that the Zulu War would cost, up to the meeting of Parliament next February, at least £3,000,000; and that instead of paying off their debts at the end of this year, as the Budget of 1878 promised, they would then be in a deficit of £6,094,000. What, then, should they have done towards paying off the debt for the War in Europe? No one would deny that such an expenditure as that of the Transkei and Zulu Wars, spread over three years, ought to be met out of the Revenue of those years. No one had ever yet proposed to deal with wars of the kind by way of deferred payment; and, therefore, the logical result was that if those two wars were dealt with 1720 out of the Revenue of the year they would close the present year without having devoted one sixpence towards the expenses in connection with the War in the East, which just amounted to £6,000,000, the deficit at the end of this year. They would have to begin again on the 1st of April next, spreading that payment over a series of years. Now, even if the basis of the present Budget could be trusted, the future surplus would be less than £2,000,000, and probably not much more than £1,000,000, so that on the 1st of April of next year they would start with a system of deferred payment for three, four, or five years. Whether that was sound finance or not he declined now to discuss; but he thought the House would clearly see what the effect of the proposal of the Chancellor of the Exchequer was. The right hon. Gentleman told them that they might expect to get some of the money back from the Colonies. He had read with great interest the Papers which came before the House on the previous day, and he thought they set forth very fairly the claim of the English Government upon the Colonies; and he should not say anything which would tend to deter the Colonies from complying with the request of the English Government. But it must be remembered that the Cape Colonists had said that they had spent £1,200,000, and that they did not intend to contribute any more. He hoped, however, that they would find it necessary to do so. He was not inclined to say much upon the Estimate of the Chancellor of the Exchequer with respect to the outcome of the present year; but he felt bound to point out to the right hon. Gentleman that, at the present time, the state of Customs and Excise Revenues was very nearly as bad as at the time when, in reply to the hon. and learned Member for Oxford (Sir William Harcourt), he said that, though they looked unsatisfactory, the returns would soon show much amendment. He considered, however, that the point to which he had drawn attention—namely, that not a farthing of the expense incurred in connection with the War in Europe had been met out of the Revenue of the last three years—required to be seriously weighed.
§ SIR ROBERT PEEL
thought it would have been far better if the speech just delivered by the right hon. Gentleman 1721 (Mr. Childers) had been deferred to another and more suitable opportunity, inasmuch as it consisted mainly in a discussion of the financial proposals of the Government during the last few years. What he (Sir Robert Peel) rose to call attention to was that the Chancellor of the Exchequer had most distinctly promised the House that, in the course of the present month, they should have an opportunity of discussing the whole of the affairs which had taken place in connection with South Africa. He understood that the Chancellor of the Exchequer had given Notice that he would, in Committee of Ways and Means, proceed to move certain Resolutions; but it appeared now that, without giving Notice, he had adopted a different plan, and he did not know that precluded hon. Members from entering into a discussion on Zulu affairs. The other day, when he attempted to draw attention to certain matters in connection with South Africa, he was told that he would have every opportunity to do so when the Estimate was proposed; but it appeared him that the Chancellor of the Exchequer had rather slurred over the promise he had made, to give the House a full opportunity of discussing the question, and he trusted the House would at once go into Committee and discuss the points raised by the proposals of the Chancellor of the Exchequer. The right hon. Gentleman had told the House that the Zulu War was only to cost £4,500,000; but those who were in the House at the commencement of the Abyssinian War would remember that they were told that the war was only to cost £3,000,000, when it really cost £9,000,000. No one in the House or in the country would believe that this miserable, mismanaged war in South Africa would only cost the taxpayers of this country £3,000,000 or £4,000,000. The Chancellor of the Exchequer, in his remarks, had made use of the word "additional" expenditure. Did the right hon. Gentleman mean to add that additional expenditure to what had been already incurred?
§ THE CHANCELLOR OF THE EXCHEQUER
What I meant by additional expenditure was the expenditure over and above the ordinary Army and Navy Votes.
§ SIR ROBERT PEEL
said, that that showed what an appalling state of things 1722 they had come to; it showed how dangerous it was to trust to these flimsy remarks without bringing them to book. In addition to what had been already voted, which was large enough, they were now told the present Votes were additional ones; and, in spite of the pledge given to the House, it was proposed to drive off the debate until next week. The state of affairs was most serious, and yet they were not to be allowed to discuss them. He really thought the Chancellor of the Exchequer was bound in honour to bring on the discussion at once. He would appeal to the Government whether the present was not the most fitting opportunity to discuss the subject? He had come down to the House prepared to go most fully into the matter, and he had no doubt hon. Gentlemen on both sides of the House had done the same. He thought the country ought to know, without further delay, what was the state of affairs; and he, therefore, trusted that the Chancellor of the Exchequer would consent to discuss the matter at once.
§ THE CHANCELLOR OF THE EXCHEQUER
I may say, by way of personal explanation, that I stated some time ago that we would present this Estimate, and, having given Notice that it would be presented to-day, I was asked by the right hon. Member for Pontefract (Mr. Childers), and others, whether we would bring the matter forward and allow it to be discussed; but I gathered from the tone in which the inquiry was made that it was not desired that the discussion should take place to-day. I, therefore, did not bring the Vote forward, because I really thought it would be for the convenience of the House not to vote it to-day.
§ MR. CHILDERS
said he, personally, should have preferred that the debate should have gone on that night; but they all clearly understood from the Chancellor of the Exchequer that it was not to be proceeded with.